The decision on submarine project was taken at Defence Acquisition Council meeting. (Representational)
The defence ministry on Tuesday shortlisted two Indian shipyards and five foreign defence majors for the Rs 50,000 crore project to build six conventional submarines in India for the Navy besides approving military procurement worth Rs 5,100 crore.
The shortlisted Indian entities to construct the submarines, being billed as one of biggest "Make in India" projects, are L&T group and state-owned Mazagaon Docks Ltd (MDL), official sources said.
Adani Defence, which was a strong contender for the project, named as P-75 I, failed to make the cut following a detailed evaluation of eligibility criteria by a high-powered committee, they said.
The Congress last week had alleged that the government was "favouring" the Adani group for the submarine project. The Adani group had joined hands with Hindustan Shipyard (HSL) in a bid to bag the project.
The mega project is being implemented under the ambitious strategic partnership model under which select private firms are being roped in to build military platforms like submarines and fighter jets in India in partnership with original equipment maker.
The decisions on the submarine project and procurement of military equipment were taken at a meeting of the Defence Acquisition Council (DAC) chaired by Defence Minister Rajnath Singh and attended by Chief of Defence Staff Gen. Bipin Rawat.
The five global defence majors selected by the committee for the P-75I project are - ThyssenKrupp Marine Systems (Germany), Navantia (Spain) and Naval Group (France), Rubin Design Bureau (Russia), and Daewoo Shipbuilding and Marine Engineering (South Korea).
Initially Reliance Naval & Engineering was among the Indian contenders.
Within the next six weeks, the defence ministry will issue RFP (request for proposal) to MDL and L&T and the two firms will have to submit their detailed bid within 3-4 months after receiving the document.
Both L&T and MDL will have to select a foreign partner out of the five shortlisted entities.
"The DAC approved shortlisting of Indian strategic partners (SP) and the potential original equipment manufacturers (OEMs) that would collaborate with SPs to construct six conventional submarines in India," the defence ministry said in a statement.
It said strategic partner is expected to play a "transformational role" in building an eco-system in the country, comprising development entities, specialised vendors and suppliers.
The Indian Navy plans to acquire 24 new submarines, including six nuclear attack submarines to bolster its underwater fighting capability.
The defence ministry also said the DAC accorded approval for procurement of equipment worth over Rs 5,100 crore from indigenous sources.
These include sophisticated electronic warfare systems for the Army designed by Defence Research and Development Organisation (DRDO) and manufactured locally by the Indian industry.
Officials said the systems will be used in deserts and plains and will provide comprehensive electronic support and counter measure capabilities to the field formations.
"The DAC also approved prototype testing of trawl assemblies designed by DRDO for T-72 and T-90 tanks providing an important indigenous de-mining capability to the Army," said the ministry.
It said the DAC also accorded approval for inclusion of innovations for defence excellence (iDEX) in defence procurement procedure which would provide for avenues to startups and innovators wanting to be associated in military supplies.
It was the first meeting of the DAC after appointment of the Chief of the Defence Staff.
"Today's decisions are also in keeping with the mandate given to the CDS and the newly-constituted Department of Military Affairs to promote use of indigenous hardware by the services," the defence ministry said.